Title

Author

Date of Completion

Document Type

Honors College Thesis

Department

Economics

Type of Thesis

Honors College, College of Arts and Science Honors

First Advisor

Arthur Woolf

Keywords

Benefits cliff, childcare access, Vermont

Abstract

This research focuses on Vermont’s childcare cliff, examining how credit levels of different programs are impacted by changes in income. Specifically, it focuses on the Earned Income Tax Credit, the Child and Dependent Care Credit, the Child Tax Credit, and the Child Care Financial Assistance Program. It contains case studies that highlight how different life events – including increases in income and changes in marital status – impact the credit amounts that a family is receiving. This paper discusses the impacts of Vermont’s childcare cliff, specifically focusing on how the cliff creates high implicit and explicit marginal tax rates for those experiencing it. It concludes with policy recommendations the state of Vermont could utilize to mitigate the effects of the childcare cliff.